Possible ‘Development Bank’ to manage NPLs

THE Bank of Cyprus has been reported to be on the verge of setting up a separate ‘development bank’ to deal with mortgaged properties.

State broadcaster CyBC reports that the proposal is expected to be discussed at a meeting today after board members have been briefed on a report prepared by a specialist from HSBC.

Following a meeting between himself, CEO John Hourican and members of the board with President Anastasiades, the Bank of Cyprus Chairman, Christis Hassapis, said that move was not designed to split the bank into a ‘good’ and a ‘bad’ bank

The meeting at the Presidential Palace was also attended by the Finance Minister Harris Georgiades. He said that the aim was to set up a new bank to deal with property development, adding that a 500 strong team of technocrats led by Euan Hamilton, former Deputy Chief Executive of Royal Bank of Scotland, had already been established to handle non-performing loans (NPLs) amounting to several billion Euros.

Gold News reports that CEO John Hourican advised journalists that that he had not experienced any political pressure on the issue of NPLs.

According to Gold News, Hourican told journalists “I think is really important that you understand that we are dealing with every borrower in a very specific and deliberate way, to recover the bank`s position and to ensure that we treat them fairly.”

There’s a consideration in a professional way by the board of the bank of the various options that are available to us and this is a matter of discussion and debate and we have not concluded on what we are need to do but we are looking at all options as you would expect us to do.”

We have stabilized the asset quality of the bank during the last six months and it is our job to explore all options to try and accelerate the progression of the bank against its recovery plan. We are running ahead of our recovery plan today and it is our job to try and accelerate that journey to ensure that we contribute to the recovery of Cyprus.”